Costs: Brainstorming Ideas to Reduce the Amount of Input Costs Not Producing Output

Here's What's New on StrategyStreet

There are four approaches to increasing a company’s productivity, measured by the units of Input over the units of Output. The second of these four approaches calls for the reduction of units of Input that are available and paid for, but which are not producing Intermediate Cost Drivers (ICDs). We have recently improved the brainstorming ideas for this approach in the Improve/Costs section of StrategyStreet.

There are five separate actions that serve to reduce units of Input not producing ICDs:

  1. Assist Input in increasing ICDs

  2. Shift demand to use otherwise unproductive resources

  3. Improve the accuracy of the demand forecast

  4. Use short term sources of Input to meet peak demand

  5. Reduce other underemployed Input

The first four of these actions focus primarily on People costs. The fifth action focuses on Purchases and Capital.

We have updated our brainstorming outlines and added many new examples to help you develop your own new ideas to reduce your costs. We hope you find this upgrade of real help.

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